TIDMAFE
18 June 2014
African Eagle Resources plc
("African Eagle" or the "Company")
Audited Financial Results for year ended 31 December 2013
African Eagle Resources plc (the "Company") (AIM: AFE; AltX: AEA) today
announces its results and the publication of its 2013 Annual Report and
Financial Statements for the year ended 31 December 2013. This is being
posted to shareholders today and will be available on the Company's
website shortly: www.africaneagle.co.uk.
As announced on 6 June 2014 the Annual General Meeting of the Company
will be held at 9.30 a.m. (BST) on Monday, 30 June 2014, at the offices
of Beaumont Cornish Limited, 29 Wilson Street, London, EC2M 2SJ, United
Kingdom.
The financial information for the year ended 31 December 2013 has been
extracted from the accounts for the year ended 31 December 2013 on which
the report of the auditors was unqualified. The financial information
included in this announcement for the years ended 31 December 2013 and
2012 does not comprise statutory accounts for the purposes of Section
434 of the Companies Act 2006.
Chairman's Statement
2013 proved to be a very difficult year for your Company which
culminated in the sale of materially all of the assets in August 2013 as
a result of being unable to raise further funding in the capital
markets. This resulted in the Company becoming an investing company
under AIM rules and adopting an Investing Policy to seek opportunities
in the natural resources, infrastructure and services sectors in all
geographic areas. Despite this disappointment your Board is optimistic
that your Company can have a positive future. The sale of 90% of the
assets in Tanzania resulted in the Company no longer being exposed to
the tax liability of approximately GBP600,000 which was provided for in
the 2012 accounts. This, together with the cutting of corporate costs
to the bare minimum to maintain the listing, redundancies, the
mitigation of other potential and actual liabilities and a placing to
raise working capital has established a strong base for a renaissance in
the Company's fortunes.
The Company retains two potentially valuable assets:
-- approximately 9% interest in Elephant Copper Limited. Elephant Copper
Limited is preparing to list on the TSX Venture Exchange in Toronto and
holds 100% of the Mkushi copper mine in Zambia and the aim of bringing it
back into production.
-- 10% free carried interest in the Tanzanian assets sold in 2013 until
US$20 million of expenditure has been incurred and met on the assets.
Further information on events since the disposal are as follows:
-- The majority owner of the asset, Blackdown Resources (UK) Limited,
has appointed Rui de Sousa as Chairman and Ian Stalker as CEO
along with in country expertise. Mr de Sousa is a well known
figure in the sector and has 35 years' experience. Mr Stalker has
over 30 years' experience in the industry and is the former CEO of
UraMin Inc. ("UraMin"), a London and Toronto listed uranium
company until its acquisition by Areva in August 2007 for US$2.5
billion.
-- Low nickel prices in the latter part of 2013 hampered the ability
to raise further funds to progress the main asset, the Dutwa
Nickel project. However work has continued with the aim of
producing a pre-feasibility study with lower operating costs than
were previously envisaged.
-- The tax liability provided for in the 2012 accounts has been
settled by the majority owner.
-- The nickel price has increased substantially in 2014 (up over 30%)
as a result of the ban on the export of ore from Indonesia. It is
hoped that this increase will be sustained and thus be reflected
in valuations for development stage projects and the ability to
raise capital for them.
More recently the appointment of myself and Nick Clarke to the Board on
30 May 2014 has brought a new dimension and renewed enthusiasm to your
Company.
The cash position of the Company at the time of writing is approximately
GBP40,000, however on 17 June 2014 the Company entered into a loan
facility with Nick Clarke and myself whereby it can draw down a maximum
of GBP365,000 until 30 November 2015 paying interest on the sum drawn
down and any unpaid interest at 5% per annum. The Company is actively
examining ways of improving its cash position and intends to replace the
loan facility with a longer term solution in due course.
Finally, I would like to take this opportunity to express my and my
fellow Directors' appreciation for the hard work and dedication of the
former staff and directors who worked tirelessly in Tanzania and London
during very difficult times and without whose efforts it is unlikely
that the Company would have a realistic future.
Kola Karim
Chairman
17 June 2014
Strategic Review Report
Financial Performance
As set out in the Financial and Risk Review below, the Company reduced
its losses by GBP31.5m as a result of the impairment of assets in the
2012 financial statements. Further details are given in the Financial
and Risk Review.
Business Review
Nickel Assets - Dutwa
As reported in the 2012 Annual Report, the difficult capital markets and
the requirement that Dutwa would need a strategic partner resulted in
the Company appointing Cutfield Freeman and Co Ltd. as financial adviser
for the development of Dutwa. Significant efforts were directed toward
discussions with the large nickel producers and other potential parties
in both 2012 and early 2013. Several large companies expressed interest
in Dutwa but the global challenges then faced by the wider nickel
industry and commodities generally meant that no potential strategic
partners committed to the project.
This situation resulted in a transaction being sought for all of the
Tanzanian assets, including the Dutwa nickel project, for cash and/or a
carried interest in the project. Whilst potential transactions were
being progressed immediate cost cutting measures took place, including
redundancies, termination of supplier and consultant contracts and the
funding of subsidiaries on a case by case basis. This preserved working
capital to allow the transaction to be completed and also maintained the
exploration licences in good order.
Discussions were progressed with a number of interested parties and,
following a restructure of the subsidiaries into a new entity called
Blackdown Minerals, a transaction to sell 90% of the Company's
subsidiaries, assets and liabilities to Blackdown Resources (UK) Limited,
a company owned by Nick Clarke (appointed CEO of the Company on 30 May
2014) completed on 8 August 2013. The Company received US$100,000 and
has a 10% free carry in the assets until US$20 million has been incurred
and met on the exploration and development of the assets. At the same
time the Company was reclassified as an investing company under AIM
rules.
As a result the Board of Directors assembled for the development of
Dutwa was recognised as no longer being suitable for the changed needs
of the Company and Chris Pointon, Don Newport and Paul Rupia stepped
down in mid-August, following the departure of Trevor Moss at the end of
June and David Newbold at the end of March. I would like to express my
thanks and appreciation for their support and contribution to the
successful transition of the Company.
Consequently, Paul Colucci, Venkat Siva and Mark Thompson were appointed
Directors to seek a transaction to inject new assets or a business into
the Company using their considerable combined expertise. At the same
time efforts to reduce corporate costs continued and as part of this I
became the Company's only employee from the start of October 2013.
Advisers terms were renegotiated or new advisers sought to suit the
Company's situation. The lease for the office in London was assigned at
the start of December. These changes reduced the monthly cash burn to
realistically the lowest possible whilst maintaining the AIM and
Johannesburg AltX quotations.
During this time the new Directors, along with Julian McIntyre and
myself, worked hard to seek a transaction for the Company that was value
enhancing for shareholders, and this work continued into 2014. A number
of potential transactions were examined that were mostly, but not
exclusively, in the resources sector. Unfortunately none of these
potential transactions progressed to the stage where any binding
agreements were reached and as a result Nick Clarke through his wholly
owned company Salkeld Investments Limited (which subsequently sold
16.18% of the issued share capital in the Company to Shoreline Energy
International, a company of which Kola Karim owns 90% of the issued
share capital and of which he is CEO) purchased the Directors' shares in
early April 2014 and both he and Kola Karim were appointed to the Board
on 30 May 2014. Paul Colucci, Venkat Siva, Mark Thompson and Julian
McIntyre all stepped down as Directors prior to these appointments.
Copper Assets - Zambia
The Company's copper assets in Zambia were sold to Elephant Copper
("Elephant") with the sale closing in November 2012. As a result of the
transaction the Company and a subsidiary held a 21% interest in Elephant,
a private company managed from South Africa that is seeking to list on
the Toronto Stock Exchange. This interest has subsequently been reduced
to 8.7% by the sale of the subsidiary and dilution from Elephant's
acquisition of the 51% interest in the Mkushi copper mine that it didn't
own during August 2013, bringing its interest therein to 100%.
Key Performance Indicators
The Board actively monitors KPI's as described in more detail in the
Financial and Risk Review with the primary objective of ensuring
adequate working capital for the Company.
Principal Risks and Uncertainties
The principal risk faced by the Company is the risk of running out of
working capital. During 2013 this risk was mitigated by the cost
cutting measures described above and the mitigation of potential legacy
liabilities. The Board has worked closely with major shareholders to
maintain adequate funding.
Outlook
We believe that inherent value remains in the Company's shareholdings in
Blackdown Minerals and in Elephant Copper and the directors continue to
explore ways of realising that value whilst maintaining the Company as a
going concern and seeking new investments for the Company that will
implement the Investing Policy.
Robert McLearon
Finance Director
17 June 2014
Financial and Risk Review
As set out in the Chairman's Statement, the Strategic Review Report and
in note 2(a) to the financial statements, the Company disposed of all of
its subsidiaries on 8 August 2013. As a result these financial
statements are for the Company only and the comparatives for 2012 have
also been prepared for the Company. The main differences between the
Company results and the consolidated results for 2012 are an increase in
loss of GBP5.8 million as a result of impairment of assets being GBP6.4
million higher. This is partially offset by the GBP0.6 million tax
liability not being applicable to the Company. The main differences for
the statement of financial position are the removal of the GBP0.6
million tax liability, a reduction in payables of GBP1.1 million and
there no longer being a merger or foreign currency reserve.
Comprehensive loss
The loss before taxation attributable to owners of the Company decreased
from GBP34.7 million in 2012 to GBP3.3 million in 2013 mainly as a
result of impairment charges of GBP31.8 million in 2012. The loss in
2013 was also significantly impacted by the loan impairments of GBP2.2
million. Employee benefits and other expenses decreased from GBP1.6
million in 2012 to GBP0.5 million in 2013 mainly as a result of the
reduction in staff numbers during the year. The loss per share decreased
from 5.67 pence in 2012 to 0.44 pence in 2013.
Statement of financial position
As set out in note 12 to the financial statements the investments in
Elephant Copper Limited and Blackdown Minerals Limited were revalued at
31 December 2013 resulting in an increase in investments of GBP0.8
million. This partially offset a decrease in assets of GBP2.6 million,
largely as a result of the decrease in cash of GBP3.4 million.
Payables decreased by GBP0.46 million as a result of lower corporate
activity.
Share capital and share premium increased by GBP0.3 million after
expenses as a result of a fund raising in September 2013.
Cash flow
Net cash decreased over the year to GBP0.18 million at 31 December 2013
compared to GBP3.6 million at 31 December 2012. GBP0.3 million after
expenses was raised by share issuance during the year (2012: GBP12.2
million). GBP2.04 million was used in investing activities and GBP1.67
million in operating activities principally prior to the disposal of the
Tanzanian assets completed on 8 August 2013.
Key performance indicators
The Board of African Eagle monitors the following relevant KPIs on a
monthly basis:
Financial KPIs
The Directors regularly review operating costs, capital expenditure and
forecasts in order to ensure that there are sufficient cash resources to
finance the continuing and future development of the Company. The
principal KPIs are set out below:
-- Total expenditure burn rates - post disposal the burn rate was rapidly
reduced and now averages GBP20,000-GBP25,000 per month
-- Monthly cash flow budget comparisons - post the disposal of subsidiaries
the monthly cash flow followed budgeted figures closely except for
unanticipated expenditure relating to the termination of a former
supplier and an insurance premium
-- Annual budget and forecast reviews - a new budget was approved following
the disposal of subsidiaries to reflect the new circumstances of the
Company
The KPIs can be applied to the financial results as follows although it
should be noted that comparability with the prior year is difficult as
significant expenditure was incurred in 2012 when the Company was
developing the Dutwa project in Tanzania:
Year to Year to
31 December 31 December
2013 2012
GBP GBP
Cash flow used in operating activities (1,670,123) (2,387,153)
Cash flow used in investing activities (2,043,396) (8,250,834)
Cash flow from financing activities 300,000 12,202,857
Non-financial KPIs
Health and safety - number of reported incidents. There were no serious
incidents reported during the year.
Risk review
The risks inherent in an investing Company have been reviewed by the
Board. The principal risk is detailed below.
Liquidity risk
Liquidity risk is the risk of running out of working and investment
capital. African Eagle will rely on the issue of equity capital and
loans to finance its activities in the near future. However, there can
be no assurance that adequate funding will be available when required to
finance the Company's activities and expansion.
Robert McLearon
Finance Director
17 June 2014
Report of the Directors
To the members of African Eagle Resources plc, Company number 3912362
The Directors present their report together with the audited financial
statements for the year ended 31 December 2013.
Business review
A review of the Company's trading during the year and future
developments is contained in the Chairman's Statement and the Strategic
Review Report as set out above.
The Company's financial and non-financial indicators are set out in the
Financial and Risk Review above. There was a Company loss after taxation
for the year of GBP3,267,492 (2012: GBP34,745,456). The Directors do
not recommend the payment of a dividend.
Going Concern
It is the prime responsibility of the board to ensure the Company
remains as a going concern. The Company announced on 15 May 2013, that
the Directors were taking immediate steps to minimise costs and preserve
the Company's cash position, and were undertaking a restructuring as a
result of not being able to secure further funding. This resulted in
the financial statements for the year ended 31 December 2012 being
produced on a break up basis. On 8 August 2013 the Company completed the
sale of 90% of substantially all of the Company's assets and business in
Tanzania and became an Investing Company. That disposal along with the
raising of GBP300,000 (after expenses) in September 2013 and the
reduction of corporate overheads has allowed the Company to continue as
a going concern. The Company has reviewed its forecasts for the next 12
months from the date of approval of these financial statements and
concluded that as the Company has entered into a loan facility with Nick
Clarke and Kola Karim (as described in the Chairman's Statement above
and in Note 22 to the financial statements) it will have access to
adequate working capital funding to continue as a going concern. The
Directors therefore consider it appropriate to adopt the going concern
basis of accounting for the financial statements.
Directors
The Directors in office during the year and current at the date of this
report are listed below. The interests of the Directors in the shares of
the Company at 31 December 2013 or the date of resignation, and 31
December 2012 were as follows:
As at 31 December As at 31 December
2013 2012
Ordinary Ordinary
Shares Options Shares Options
Paul Colucci 14/08/2013 (Appointed) 08/05/2014 (Resigned) 14,285,714 -
Venkat Siva 14/08/2013 (Appointed) 28/05/2014 (Resigned) - -
Mark
Thompson 14/08/2013 (Appointed) 08/05/2014 (Resigned) 17,526,571 -
Chris
Pointon 26/01/2012 (Appointed) 14/08/2013 (Resigned) 750,000 150,000 750,000 150,000
Trevor Moss 01/12/2011 (Appointed) 28/06/2013 (Resigned) 1,187,500 6,000,000 1,187,500 6,000,000
David
Newbold 02/07/2012 (Appointed) 31/03/2013 (Resigned) - 3,000,000 - 3,000,000
Don Newport 26/01/2012 (Appointed) 14/08/2013 (Resigned) - - - -
Julian
McIntyre 28/04/2011 (Appointed) 28/05/2014 (Resigned) 184,245,047 - 78,530,761 -
Paul Rupia 27/07/2012 (Appointed) 14/08/2013 (Resigned) - 150,000 - 150,000
Robert 20/06/2012 (Appointed) 03/07/2012 (Resigned)
McLearon 24/06/2013 (Appointed) - 262,000 - 262,000
Kola Karim 30/05/2014 (Appointed) - -
Nick Clarke 30/05/2014 (Appointed) - -
Mark Parker 19/01/2000 (Appointed) 24/04/2012 (Resigned) 4,563,967 3,676,328
Christopher
Davies 01/02/2001 (Appointed) 24/04/2012 (Resigned) 1,047,165 3,504,618
Andrew
Robertson 01/12/2011 (Appointed) 07/06/2012 (Resigned) 182,500 3,000,000
Euan
Worthington 08/12/2000 (Appointed) 24/04/2012 (Resigned) 1,193,333 2,205,824
Geoffrey
Cooper 13/10/2003 (Appointed) 04/04/2012 (Resigned) 975,967 1,637,230
Total 217,994,832 9,562,000 88,431,193 23,586,000
Substantial shareholdings
As at 6 June 2014, the only holdings of 3% or more in the issued share
capital are:
Approximate % of the
Company's issued share
Shares in the Company capital(1)
Shoreline Energy
International Limited(2) 140,937,440 16.18%
Coburg Group Plc 98,080,999 11.26%
Salkeld Investments Ltd(3) 87,119,892 10.00%
Barclayshare Nominees Ltd 49,601,647 5.69%
TD Direct Investing
Nominees 42,532,189 4.88%
HSBC Client Holdings
Nominee 36,105,165 4.14%
HSDL Nominees Ltd 32,343,070 3.71%
Notes to substantial shareholdings
(1) Based on 871,157,261 shares issued and outstanding at 6 June 2014
(2) Kola Karim has a 90% interest in Shoreline Energy International
(3) Salkeld Investments is wholly owned by Nick Clarke
Directors' remuneration
Directors' emoluments are shown in note 8.
Statement of Directors' Responsibilities
In respect of the Strategic Report, the Directors' Report and the
Financial Statements
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Annual Report and
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to
prepare financial statements in accordance with applicable law and
International Financial Reporting Standards ("IFRSs") as adopted by the
European Union ("EU"). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of the profit
or loss for that period. The Directors are also required to prepare the
financial statements in accordance with the rules of the London Stock
Exchange for companies trading on the AIM market.
In preparing these financial statements, the Directors are required to:
-- Select suitable accounting policies and then apply them consistently;
-- Make judgments and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with IFRSs as adopted
by the European Union, subject to any material departures disclosed and
explained in the financial statements; and
-- Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records
that disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
Statement of disclosure to auditor
In so far as each of the Directors is aware:
-- There is no relevant audit information of which the Company's auditors
are unaware; and
-- The Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that
the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
Events after Balance Sheet date
Refer to note 22 for details of the events after the balance sheet date.
Payment policy and practice
It is the Company's normal practice to settle the terms of payment when
agreeing the terms of a transaction, to ensure that suppliers are aware
of those terms, and to abide by them. The Company had no trade payables
at the year end.
Financial risk management objectives and policies
The Company's financial risk management objectives and policies are set
out in the Financial and Risk Review above and comply with the
disclosure made in note 19 relating to the disclosure required by IFRS 7
Financial Instruments.
Auditors
Jeffreys Henry LLP replaced PricewaterhouseCoopers LLP as auditors
during the year. Jeffreys Henry LLP offer themselves for reappointment
as auditors in accordance with Section 489 (4) of the Companies Act
2006.
On Behalf of the Board
Robert McLearon
Finance Director
17 June 2014
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AFRICAN EAGLE RESOURCES
PLC
We have audited the financial statements African Eagle Resources PLC for
the year ended 31 December 2013 which comprise Statements of Financial
Position, Statement of Comprehensive Income, Statement of Cash Flows,
Statements of Changes in Equity and the related notes. The financial
reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs)
as adopted by the European Union and is applied in accordance with the
provisions of the Companies Act 2006.
This report is made solely to the Company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the Company's
members those matters we are required to state to them in an auditors'
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company and the Company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the Directors' Responsibilities Statement set
out above the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and
fair view. Our responsibility is to audit and express an opinion on
the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board's Ethical
Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures
in the financial statements sufficient to give reasonable assurance that
the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the Company's circumstances and
have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial statements. In
addition, we read all the financial and non-financial information in the
Chairman's Statement, Strategic Review and Directors' Report to identify
material inconsistencies with the audited financial statements. If we
become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Opinion on financial statements
In our opinion:
- the financial statements give a true and fair view of the state of
the Company's affairs as at 31 December 2013 and of the Company's loss
and Company's cash flow for the year then ended;
- the financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union; and
- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on the other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Review Report and
Directors' Report for the financial period for which the financial
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the Company,
or returns adequate for our audit have not been received from branches
not visited by us: or
-- the Company financial statements are not in agreement with
the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Justin Randall
(Senior Statutory Auditor)
For and on behalf of Jeffreys Henry LLP
Chartered Accountants
Registered Auditors
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
17 June 2014
Statement of Comprehensive Income
For the year ended 31 December 2013
Year to Year to
31 December 31 December
2013 2012
Note GBP GBP
Employee benefits expense 4 (495,529) (1,649,651)
Reversal of impairment of available for sale
investment 5 242,601 -
Impairment of assets 5 (46,789) (8,564,872)
Other expenses 6 (925,871) (1,412,548)
Depreciation expense 11 (488) (14,515)
Profit on disposal of subsidiaries 64,937 -
Loan impairment 14b (2,191,106) (23,214,698)
Operating loss (3,352,245) (34,856,284)
Finance income:
Bank interest receivable 20,175 108,448
Foreign exchange gain on translation 64,578 2,380
Loss before tax (3,267,492) (34,745,456)
Income tax expense 9 - -
Loss for the year (3,267,492) (34,745,456)
Other comprehensive gain/(loss):
Available for sale investments fair value
adjustment 12 655,022 (40,000)
Other comprehensive gain/(loss) for the year 655,022 (40,000)
Total comprehensive loss for the year (2,612,470) (34,785,456)
Loss per share:
Basic and diluted loss per share 10 (0.44p) (5.67p)
Headline loss per share 10 (0.17p) (0.48p)
The accompanying notes form an integral part of these financial
statements.
Statement of Financial Position
As at 31 December 2013
31 December 31 December
2013 2012
Note GBP GBP
Assets
Property , plant and equipment 11 - -
Available for sale investments 12 897,623 68,000
Investments in subsidiaries - -
Other receivables - Short term 14a 75,557 77,018
Other receivables - Long term 14b - -
Cash and cash equivalents 15 176,997 3,590,516
Total assets 1,150,177 3,735,534
Liabilities
Current liabilities
Other payables 16 (87,857) (547,889)
Total liabilities (87,857) (547,889)
Net assets 1,062,320 3,187,645
Equity
Equity attributable to equity holders of
Company
Share capital 17 7,117,288 6,940,145
Share premium account 36,682,600 36,559,743
Available for sale revaluation reserve 655,022 -
Retained losses (43,392,590) (40,312,243)
Total equity 1,062,320 3,187,645
The accompanying notes form an integral part of these financial
statements.
The financial statements were approved by the Board of Directors and
authorised for issue on 17 June 2014.
Company No. 03912362
Robert McLearon
Director
17 June 2014
Statement of Changes in Equity
For the year ended 31 December 2013
Share Available for sale
Share premium revaluation Retained Total
Capital account reserves Losses Equity
GBP GBP GBP GBP GBP
Balance at 1
January 2012 4,095,862 27,201,169 40,000 (5,882,109) 25,454,922
Loss for year - - - (34,745,456) (34,745,456)
Other
comprehensive
income/(loss):
Available for
sale
investments -
fair value
adjustment - - (40,000) - (40,000)
Total
comprehensive
loss for the
year - - (40,000) (34,745,456) (34,785,456)
Transactions
with equity
owners for
2012:
Issue of share
capital 2,844,283 9,807,116 - - 12,651,399
Share issue
costs - (448,542) - - (448,542)
Share-based
payments - - - 315,322 315,322
Total
transactions
with equity
owners 2,844,283 9,358,574 - 315,322 12,518,179
Balance at 31
December 2012 6,940,145 36,559,743 - (40,312,243) 3,187,645
Loss for year - - - (3,267,492) (3,267,492)
Other
comprehensive
income/(loss):
Available for
sale
investments -
fair value
adjustment - - 655,022 - 655,022
Total
comprehensive
loss for the
year - - 655,022 (3,267,492) (2,612,470)
Transactions
with equity
owners for
2013:
Issue of share
capital 177,143 132,857 - - 310,000
Share issue
costs - (10,000) - - (10,000)
Share-based
payments - - - 187,145 187,145
Total
transactions
with equity
owners 177,143 122,857 - 187,145 487,145
Balance at 31
December 2013 7,117,288 36,682,600 655,022 (43,392,590) 1,062,320
The accompanying notes form an integral part of these financial
statements.
Statement of Cash Flow
For the year ended 31 December 2013
Year to Year to
31 December 31 December
2013 2012
Note GBP GBP
Operating activities
Loss after taxation (3,267,492) (34,745,456)
Adjustments for non-cash items:
Impairment of assets 5 46,789 8,564,872
Reversal of impairment of available for sale
investment 5 (242,601) -
Depreciation expense 11 488 14,515
Profit on disposal of subsidiaries (64,937) -
Loan impairment 2,191,106 23,214,698
Profit on disposal of assets (41,876) -
Loss on disposal of property, plant and
equipment - 694
Share-based payments 18 187,145 315,322
Interest received (20,175) (108,448)
Decrease/(increase) in other receivables 1,462 (39,669)
(Decrease)/increase in other payables (460,032) 396,319
Cash flow used in operating activities (1,670,123) (2,387,153)
Investing activities
Payments to acquire property, plant and
equipment 11 (1,955) (87,964)
Funds advanced to subsidiaries (2,191,106) (8,271,318)
Proceeds from sale of assets 43,342 -
Proceeds from disposal of subsidiaries 64,937 -
Proceeds from disposal of available-for-sale
investment 21,211 -
Interest received 20,175 108,448
Cash flow used in investing activities (2,043,396) (8,250,834)
Financing activities
Net proceeds from issue of share capital 300,000 12,202,857
Cash flow from financing activities 300,000 12,202,857
Net increase/(decrease) in cash and cash
equivalents (3,413,519) 1,564,870
Cash and cash equivalents at beginning of
year 15 3,590,516 2,025,646
Cash and cash equivalents at end of year 15 176,997 3,590,516
The accompanying notes form an integral part of these financial
statements.
Notes to the Financial Statements
For the year ended 31 December 2013
1 NATURE OF OPERATIONS AND GENERAL INFORMATION
African Eagle Resources plc ("African Eagle" or the "Company") whose
registered address is 64 New Cavendish Street, London, W1G 8TB is a
public limited company incorporated and domiciled in England and is
listed on the AIM market of the London Stock Exchange and on the
Alternative Exchange of the Johannesburg Stock Exchange Limited
("AltX").
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
African Eagle's financial statements are presented in pounds sterling
(GBP), which is also the functional currency of the Company.
The Company disposed of all its subsidiaries on 8 August 2013 and only
held minority investments at 31 December 2013. The 2013 financial
statements are therefore prepared on a Company only basis with
comparatives provided for 2012 for the Company.
Going Concern
The financial statements have been prepared on a going concern basis the
validity of which is based on the continued support of the Directors.
Were the Company to be unable to continue as a going concern adjustments
would have to be made to the statement of financial position to reduce
the value of the assets to their recoverable amounts and to provide for
future liabilities.
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and IFRIC
interpretations issued by the International Accounting Standard Board
(IASB) as adopted by the European Union and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The
financial statements have been prepared under the historical cost
convention. The principal accounting policies adopted are set out below.
(b) Taxation
Current income tax assets and liabilities comprise those obligations to,
including company estimates, or claims from, fiscal authorities relating
to the current or prior reporting period, that are unpaid at the 31
December. They are calculated according to the tax rates and tax laws
applicable to the fiscal periods to which they relate, based on the
taxable profit for the year.
Deferred income taxes are calculated using the liability method on
temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities and
their tax bases. However, deferred tax is not provided on the initial
recognition of goodwill or on the initial recognition of an asset or
liability unless the related transaction is a business combination or
affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in
subsidiaries is not provided if reversal of these temporary differences
can be controlled by the Company and it is probable that reversal will
not occur in the foreseeable future. In addition tax losses available to
be carried forward as well as other income tax credits to the Company
are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full. Deferred tax assets are
recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against
future taxable income. Current and deferred tax assets and liabilities
are calculated at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or
substantively enacted at 31 December. Changes in deferred tax assets or
liabilities are recognised as a component of tax expense in the profit
or loss, except where they relate to items that are charged or credited
to other comprehensive income or directly to equity in which case the
related deferred tax is also charged or credited to equity. The deferred
tax asset in Note 9 has not been recognised. The deferred tax asset will
be recognised when it is more likely than not that it will be
recoverable.
(c) Property, plant and equipment
Property, plant and equipment are held at historical cost net of
depreciation and any provision for impairment. Depreciation is
calculated to write down the cost or valuation less estimated residual
value of all property, plant and equipment over their estimated useful
economic lives. The useful economic lives are assessed at least
annually. The rates generally applicable are:
Motor vehicles 25%
Equipment 25%
Fixtures and fittings 20%
Material residual value estimates are updated as required, but at least
annually, whether or not the asset has been revalued. Where the carrying
amount of an asset is greater than its estimated recoverable amount, it
is written down immediately to its recoverable amount.
(d) Share-based payments
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where employees
are rewarded using share-based payments, the fair values of employees'
services are determined indirectly by reference to the fair value of the
instrument granted to the employee. This fair value is appraised at the
grant date and excludes the impact of non-market vesting conditions.
Share options granted by the Company vest one year from the date of
grant. All equity-settled share-based payments are ultimately recognised
as an expense in the statement of comprehensive income with a
corresponding credit to retained losses in the statement of financial
position. If vesting periods or other non-market vesting conditions
apply, the expense is allocated over the vesting period, based on the
best available estimate of the number of share options expected to vest.
Estimates are revised subsequently if there is any indication that the
number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised in
the current year. No adjustment is made to any expense recognised in
prior periods if share options that have vested are not exercised. Upon
exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital and, where appropriate,
share premium. The fair value has been arrived at using the
Black-Scholes model. The key inputs to these models include: exercise
price; share price volatility; dividend yield (if any) and lapse rate.
(e) Financial instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of
another entity. Financial assets are recognised in the statement of
financial position at fair value on initial recognition and include cash
and cash equivalents, other receivables, and equity instruments of
another enterprise. Cash and cash equivalents includes cash in hand,
deposits held at call with banks, and other short-term highly liquid
investments with original maturities of three months or less from
acquisition.
Financial assets in the financial statements are divided into loans and
receivables and available for sale assets. Financial assets are assigned
to the different categories by management on initial recognition,
depending on the purpose for which they were acquired. The designation
of financial assets is re-evaluated at every reporting date at which a
choice of classification or accounting treatment is available. Other
receivables include non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. After
initial recognition these assets are measured at amortised cost using
the effective interest method less provision for impairment. Any change
in their value is recognised in the Statement of Comprehensive Income.
Financial liabilities are obligations to pay cash or other financial
assets and are recognised when the Company becomes a party to the
contractual provisions of the instrument. Financial liabilities
categorised at fair value through the profit or loss are recorded
initially at fair value; all transaction costs are recognised
immediately in profit or loss. All other financial liabilities are
recorded initially at fair value, net of direct issue costs. Other
payables are financial liabilities which are expected to be settled
within 12 months of 31 December.
Recognition occurs when a Company becomes a party to the contractual
provisions of the instrument. Most obligations are legally enforceable
and arise under contractual arrangements. Accrued expenses are
liabilities to pay for goods or services that have been received or
supplied but have not been paid, invoiced or formally agreed with the
supplier. The recognition of accrued expenses results directly from the
recognition of expenses for items of goods and services consumed during
the year. The initial measurement of other payables is usually at fair
value. The Company has not entered into any derivative financial
instruments for hedging or any other purpose.
Interest receivable and payable is accrued and credited/charged to the
statement of comprehensive income in the year to which it relates.
(f) Investments
Investments are stated as cost less provision for any impairment in
value
(g) Available for sale financial assets
Available for sale financial assets include non-derivative financial
assets that are either designated as such or do not qualify for
inclusion in any of the other categories of financial assets. All
financial assets within this category are measured subsequently at fair
value, with changes in value recognised through other comprehensive
income, through the Statement of Comprehensive Income. Gains and losses
arising from investments classified as available for sale are recognised
in profit or loss when they are sold or when the investment is impaired.
In the case of impairment of available for sale assets, any loss
previously recognised through other comprehensive income is transferred
from equity reserve to profit and loss. Impairment losses recognised in
the statement of comprehensive income on equity instruments are not
recognised through other comprehensive income. Impairment losses
recognised previously on debt securities are reversed through the profit
or loss when the increase can be related objectively to an event
occurring after the impairment loss was recognised in the statement of
comprehensive income.
(h) Income and expense recognition
The Company's only income is interest receivable from bank deposits.
Operating expenses are recognised in the statement of comprehensive
income upon utilisation of the service or at the date of their origin.
Interest received is recognised upon receipt and any outstanding
interest is accrued at the end of the year. All other income and
expenses are reported on an accrual basis.
(i) Foreign currency translation
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date
are translated to sterling at the foreign exchange rate ruling at that
date. Foreign exchange differences arising on translation are recognised
in the income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated to Sterling at foreign
exchange rates ruling at the dates the fair value was determined.
(j) Equity
Equity comprises the following:
-- "Share capital" is the nominal value of equity shares.
-- "Share premium account" represents the excess over nominal value of the
fair value of consideration received for equity shares, net of expenses
of the share issue.
-- "Available for sale revaluation reserve" represents the difference
between the fair value of the available for sale investments and the
acquisition cost of those investments.
-- "Retained losses" represents retained earnings.
(k) Operating lease agreements
Leases in which a significant portion of the risks and rewards of
ownership are not transferred to the lessee are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Comprehensive Income on a straight-line basis over the
period of the lease.
(l) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprise cash on hand and demand deposits together with other short-term,
highly liquid investments that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of
changes in value.
(m) New and amended standards adopted by the Company
The Company has adopted the following new and amended IFRS and IFRIC
interpretations as of 1 January 2013:
-- Amendment to IAS 1, "Presentation of financial statements - Presentation
of items of other comprehensive income" (Effective date 1 July 2012)
-- IFRS 13, "Fair value measurement" (Effective date 1 January 2013)
-- Annual improvements 2011 (Effective date 1 January 2013)
The impact of adopting the above amendments had no material impact on
the financial statements of the Company.
(n) Standards, interpretations and amendments to published standards
that are not yet effective
The following standards, amendments and interpretations applicable to
the Company are in issue but are not yet effective and have not been
early adopted in these financial statements. They may result in
consequential changes to the accounting policies and other note
disclosures. We do not expect the impact of such changes on the
financial statements to be material. These are outlined in the table
below:
Title Summary Application Application
Reference date of date of
standard Company
Amendments Amendments resulting from Annual Improvements 2010-12 IFRS 2: clarifies definition of vesting conditions Annual 1 July 2014
to IFRS 2, Cycle IFRS 3: clarifies contingent consideration in a business periods
IFRS 3 combination beginning
on or after
1 July
2014
IFRS 9 Financial Instruments Revised standard for accounting for financial instruments Periods 1 January
commencing 2015
on or after
1 January
2015
IAS 36 Impairment of assets Limited scope amendments to disclosure requirements Periods 1 January
commencing 2014
on or after
1 January
2014
The Directors anticipate that the adoption of these standards and the
interpretations in future periods will have no material impact on the
financial statements of the Company.
(o) Segmental reporting
There are no reportable segments other than the company itself.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Company makes estimates and assumptions concerning the future. The
resulting estimates will by definition, seldom equal the actual results.
Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. Many of the amounts included in the financial statements
involve the use of judgement and/or estimation. These judgements and
estimates are based on management's best knowledge of the relevant facts
and circumstances, having regard to prior experience, but actual results
may differ from the amounts included in the financial statements. The
most critical judgements as applied to these financial statements are as
follows:
-- Valuation of assets and reversal of impairment: the Company annually
considers the carrying value of its investments by reference to
publically available information for similar investments and the
valuations implied therein, if available. If no public information is
available the Company will use the information that is available to form
a judgement as to the valuation.
-- Going concern: the Company determines whether it has sufficient resources
in order to continue its activities by reference to budgets together with
current and forecast liquidity. This requires an estimate of the
availability of such funding which is critically dependent on the
specific circumstances of the Company and, to a lesser extent,
macro-economic factors.
4 EMPLOYEE BENEFITS EXPENSE
2013 2012
GBP GBP
Share-based payments 187,145 315,322
Salaries and employment taxes 308,384 1,320,625
Other - 13,704
495,529 1,649,651
The employee benefits expense above is expensed to the Statement of
Comprehensive Income.
5 IMPAIRMENT
Note 2013 2012
GBP GBP
Property plant and equipment 11 - 75,127
Available for sale investments 46,789 978,774
Loss on disposal of subsidiary - 7,415,757
Reversal of impairment (242,601) -
Other receivables - short term 14a - 95,214
(195,812) 8,564,872
6(a) OTHER EXPENSES
Other expenses included in the Statement of Comprehensive Income include
the following items:
2013 2012
GBP GBP
Loss on sale of property, plant and equipment 1,466 569
Profit on sale of assets (43,342) -
Operating lease costs: Land & Buildings 33,716 35,990
Equipment 7,200 6,774
Business and professional development 11,030 39,574
Legal & professional fees 726,720 722,403
Consultants 29,438 112,046
Insurance 35,822 30,822
Office costs 55,103 83,642
Travel & subsistence 40,996 108,457
6(b) AUDITORS'S REMUNERATION
During the year the Company obtained the following
services from the auditor and its associates:
2013 2012
GBP GBP
Fees payable to the company's auditor and its associates
for the audit of the Company financial statements 22,116 95,000
Tax and other advisory services - 55,908
Total 22,116 150,908
Total fees for 2013 include GBP7,616 of additional fees for 2012 payable
to PriceWaterhouseCoopers for the audit of the financial statements for
the year ended 31 December 2012 (2012 does not have any additional fees
for 2011).
7 OPERATING SEGMENTS
In the opinion of the Directors the Company's turnover, loss before tax
and net assets are not attributable to classes of business or
geographical segments which differ substantially from each other.
8 DIRECTORS AND EMPLOYEES
Staff costs of the Company during the year were as follows:
2013 2012
GBP GBP
Wages and salaries 257,983 1,219,217
Share-based payments 187,145 315,322
Social security costs 50,374 82,542
Other 27 32,570
495,529 1,649,651
The monthly average number of employees in the Company was 7 (2012:12).
The Directors constitute the only key management personnel of the
Company.
Remuneration in respect of Directors was as follows:
2013 2012
GBP GBP
Emoluments including share-based payments relating
to the Company 385,165 1,033,114
The Company does not contribute towards pension schemes in the UK or
overseas.
Directors' emoluments in respect of 2013 and 2012 are detailed below:
Share Total
Salary Fees Options Other 2013
2013 GBP GBP Compensation GBP GBP GBP
Christopher Pointon - 28,125 - 1,646 - 29,771
Trevor Moss 77,015 - - 93,420 1,155 171,590
David Newbold 44,000 - - 46,710 678 91,388
Don Newport - 15,625 - - - 15,625
Paul Rupia - 15,717 - 1,646 - 17,363
Robert McLearon 59,308 - - - 120 59,428
180,323 59,467 - 143,422 1,953 385,165
In addition to the above, GBP136,000 was paid to HAWM Consulting, Inc a
Company owned by Trevor Moss and payable by Tanzania Nickel Holdings
Limited, a subsidiary until disposal on 8 August 2013. This figure
comprised GBP36,000 in fees and GBP100,000 in compensation.
Share Total
2012 Salary Fees Compensation(3) options Other 2012
GBP GBP GBP GBP GBP GBP
Christopher
Pointon - 36,250 - 1,250 - 37,500
Trevor Moss(1) 150,000 107,035 - 33,170 1,057 291,262
David Newbold 88,000 - - 16,585 1,240 105,825
Don Newport - 23,301 - - - 23,301
Paul Rupia - 10,417 - 1,250 - 11,667
Robert McLearon 2,222 - - 8,308 137 10,667
Mark Parker 39,896 - 75,000 31,322 1,175 147,393
Christopher
Davies 37,121 - 122,700 29,143 1,449 190,413
Andrew
Robertson 90,500 - - 15,867 - 106,367
Euan
Worthington(2) - 20,162 101,000 16,342 - 137,504
Geoffrey Cooper - 10,217 58,500 9,533 - 78,250
407,739 207,382 357,200 162,770 5,058 1,140,149
(1) This includes GBP107,035 paid to HAWM Consulting, Inc a Company
owned by Trevor Moss and payable by Tanzania Nickel Holdings Limited, a
subsidiary until disposal on 8 August 2013.
(2) This includes GBP2,500 paid to Mining Finance Solutions a Company
owned by Euan Worthington.
(3) The compensation to Directors is restated to reflect actual payments
made during 2013. Any adjustments have been accounted for in the 2013
accounts.
9 INCOME TAX EXPENSE
The tax on the Company's profit before tax differs from the theoretical
amount that would arise using the weighted average tax rate applicable
to profits of the company as follows:
2013 2012
GBP GBP
Loss for year multiplied by standard rate of UK corporation
tax 23.25% (2012: 24.5%) (759,692) (8,512,637)
Expenses not deductible for tax purposes 556,713 7,798,842
Movement in un-recognised deferred tax asset 202,979 713,795
Unrealised foreign exchange losses/(gains) - -
Tax charge for the year - -
Unrecognised deferred tax asset:
UK tax losses 1,338,757 1,829,686
Short term temporary differences 506,544 487,928
Net property, plant and equipment temporary differences 3,321 (2,538)
1,848,622 2,315,076
The deferred tax asset would be recoverable if taxable profits were
generated. Deferred tax relating to share-based payments is a short
term temporary difference. The standard rate of corporation tax in the
UK changed from 24% to 23% with effect from 1 April 2013. Accordingly,
the company's profits for this accounting period are taxed at an
effective rate of 23.25%.
10 LOSS PER SHARE
Basic and diluted loss per share
The calculation of basic loss per share is based on the loss for the
year divided by the weighted average number of ordinary shares in issue
during the year. In calculating the diluted loss per ordinary share
potential ordinary shares such as share options and warrants have not
been included as they would have the effect of decreasing the loss per
share. Decreasing the loss per share would be anti-dilutive. Details of
share options and warrants in issue that could potentially dilute
earnings per share in the future are detailed in Note 17.
2013 2012
GBP GBP
Loss for the year (3,267,492) (34,745,456)
Weighted average number of shares in issue 744,975,036 613,317,814
Basic and diluted loss per share (0.44p) (5.67p)
Headline loss per share
Headline loss per share has been calculated in accordance with the
Institute of Investment Management and Research's ("IMR") Statement of
Investment Practice No.1 entitled 'The Definition of Headline Earnings'
and The South African Institute of Chartered Accountants Circular 2/2013
entitled 'Headline Earnings'. The calculation of headline loss per share
is based on the headline loss for the year divided by the weighted
average number of shares in issue during the year. No diluted headline
loss per share has been calculated as it would be anti-dilutive by
reducing the headline loss per share.
2013 2012
Headline loss GBP GBP
Loss for the year (3,267,492) (34,745,456)
Adjusted for:
Plus loss on disposal of property, plant and
equipment - 569
Reversal of impairment of available for sale
investment (242,601) -
Loan impairment 2,191,106 -
Impairment of assets 46,789 31,779,570
Headline loss for the year (1,272,198) (2,965,317)
Weighted average number of shares in issue 744,975,036 613,317,814
Basic headline loss per share (0.17p) (0.48p)
11 PROPERTY, PLANT AND EQUIPMENT
Leasehold Fixtures and
improvement fittings Total
2013 GBP GBP GBP
Cost:
At 1 January 2013 56,261 58,437 114,698
Additions 1,955 - 1,955
Disposals (58,216) - (58,216)
At 31 December 2013 - 58,437 58,437
Accumulated depreciation:
At 1 January 2013 56,261 58,437 114,698
Charge for the year 488 - 488
Disposals (56,749) - (56,749)
At 31 December 2013 - 58,437 58,437
Carrying amount at 31 December 2013 - - -
Leasehold Fixtures and
improvement fittings Total
2012 GBP GBP GBP
Cost:
At 1 January 2012 685 27,033 27,718
Additions 55,576 32,388 87,964
Disposals - (984) (984)
At 31 December 2012 56,261 58,437 114,698
Accumulated depreciation:
At 1 January 2012 685 24,661 25,346
Charge for the year 8,337 6,178 14,515
Disposals - (290) (290)
Impairments at the balance sheet date 47,239 27,888 75,127
At 31 December 2012 56,261 58,437 114,698
Carrying amount at 31 December 2012 - - -
All of the Company's property plant and equipment listed above are free
of any mortgage and charge.
12 AVAILABLE FOR SALE INVESTMENTS
2013 2012
GBP GBP
Investment in Kibo Mining plc
Cost:
At 1 January 68,000 160,000
Release of revaluation reserve during the year - (40,000)
Impairment (46,789) (52,000)
Proceeds from sale (21,211)
Carrying amount at 31 December - 68,000
Investment in Elephant Copper Limited
Cost:
At 1 January - -
Investments during the year - 847,167
Reversal of impairment/(impairment) 242,601 (847,167)
Carrying amount at 31 December 242,601 -
Investment in Blackdown Minerals Limited
Cost:
At 8 August - -
Revaluation during the period 655,022 -
Carrying amount at 31 December 655,022 -
Total carrying amount at 31 December 897,623 68,000
Kibo Mining plc
The Kibo investment was received in respect of compensation arising from
the termination of a joint venture between the Company and Sloane
Developments Limited (a wholly owned subsidiary of Kibo Mining). The
Company held 533,333 shares in Kibo Mining following a 1 for 15 share
consolidation. The shares were sold for 4p each on 18 July 2013 raising
gross proceeds of GBP21,333. At 31 December 2012 the holding was valued
at GBP68,000.
Investment in Elephant Copper Limited
The shares in Elephant Copper Limited were valued at US$0.044 per share
on the basis of available information received from third party offers
and the opinion of the Directors resulting in a carrying value of
GBP242,601 using the exchange rate at 31 December 2013. At 31 December
2012 the shares were fully impaired.
Investment in Blackdown Minerals Limited
The Company has a 10% shareholding in Blackdown Minerals Limited, the
holding company for the Tanzanian companies that were disposed of by the
Company in August 2013. The company valued its investment by comparing
the nickel deposit at Dutwa (the principal asset in Tanzania) to the
derived valuation of contained nickel in the ground to the following:
-- a listed company at a similar stage of development
-- a recently announced transaction by another similar company
-- a similar listed company taken private
-- ENK's sale of its interest in another nickel company
-- and a similar company that was delisted
A discount factor has then been applied to the average figure to take
into account the following factors:
1. The deposit is privately held - 25% discount
2. The minority stake - 25% discount
The total discount is therefore 50%.
The undiscounted value of 10% of the attributable tonnage at Dutwa of
739,000 Mt and valued at US$29/metric tonne is therefore US$2.15
million. Applying the 50% discount gives a valuation of US$1.08 million
for African Eagle's stake resulting in a carrying value of GBP655,022
using the exchange rate at 31 December 2013.
13 SIGNIFICANT SUBSIDIARIES
The Company had no subsidiaries at 31 December 2013 following the
disposal of 90% of the Group's assets on 8 August 2013.
14a OTHER RECEIVABLES - SHORT TERM
2013 2012
GBP GBP
Other receivables 12,086 62,863
Prepayments & accrued income 63,471 109,369
Impairments - (95,214)
75,557 77,018
14b OTHER RECEIVABLES - LONG TERM
2013 2012
GBP GBP
Amounts owed by group undertakings 2,191,106 23,214,698
Released during the year (2,191,106) (23,214,698)
- -
The Company's receivables are unsecured.
15 CASH AND CASH EQUIVALENTS
2013 2012
GBP GBP
Cash at bank and in hand 176,997 3,590,516
176,997 3,590,516
16 OTHER PAYABLES
2013 2012
GBP GBP
Other payables 47,498 27,261
Social security and other taxes 5,069 29,930
Accruals and deferred income 35,290 490,698
87,857 547,889
17 SHARE CAPITAL
2013 2012
GBP GBP
Allotted, called up and fully paid
Ordinary shares
Balance brought forward 6,940,145 4,095,862
Additions 177,143 2,844,283
Ordinary shares of 0.1p (2012: 1p) each at 31 December 7,117,288 6,940,145
Deferred shares
Balance brought forward - -
Sub-division of shares 6,940,145 -
Deferred shares of 0.9p each at 31 December 6,940,145 -
On 24 June 2013 the company passed an ordinary resolution to subdivide
each of the Ordinary shares of GBP0.01 each in the capital of the
Company in issue into one Ordinary share of GBP0.001, having the same
rights, being subject to the restrictions and ranking pari passu in all
respects with the existing Ordinary shares of GBP0.01 each in the
capital of the Company, and one Deferred share of GBP0.009 each in the
capital of the Company.
Ordinary shares are equally eligible to receive dividends and the
repayment of capital and entitle the member to one vote per share at a
shareholders' meeting of the Company. Deferred shares do not entitle
holders to receive notice of or attend and vote at any general meeting
of the Company or to receive a dividend or other distribution or to
participate in any return on capital on a winding up other than the
nominal amount paid on the shares following a distribution to the
holders of Ordinary shares of GBP100,000,000 in respect of each Ordinary
share held by them respectively.
During the year the Company allotted Ordinary shares with an aggregate
nominal value of GBP177,143 as follows:
Price per Share
share Capital Share premium(1) Total
(pence) Number GBP GBP GBP
Placement
proceeds 0.175p 177,142,854 177,143 132,857 310,000
(1) Before share issue costs of GBP10,000.
Warrants
At 31 December 2013 the Company had in issue 22,754,785 warrants to
subscribe for shares, (2012: 122,754,785), as follows:
-- On 27 January 2012 the Company issued 22,754,785 unlisted share purchase
warrants at an exercise price of 6.8 pence per share and an exercise
period of four years from the closing date, 27 January 2016. No warrants
have been exercised to date.
Options
The Company has granted options to subscribe for shares as follows:
Exercise Granted Exercised Cancelled At 31
price At 1 January in the in the in the December
(pence) 2013 year year year 2013
Options
(14 May 2009 to 14 May 2014) 6.5 4,170,000 - - - 4,170,000
Options
(26 May 2010 to 26 May 2015) 6.5 3,314,964 - - - 3,314,964
Options
(04 Oct 2010 to 04 Oct 2015) 6.5 8,047,036 - - - 8,047,036
Options
(29 Jul 2011 to 29 Jul 2016) 10 4,526,000 - - (262,000) 4,264,000
Options
(05 Oct 2011 to 05 Oct 2016) 10 3,000,000 - - - 3,000,000
Options
(27 Jul 2012 to 27 Jul 2018) 3.36 10,000,000 - - - 10,000,000
Options
(27 Jul 2012 to 27 Jul 2018) 4 3,000,000 - - - 3,000,000
Options
(27 Jul 2012 to 27 Jul 2016) 3.36 300,000 - - - 300,000
36,358,000 - - (262,000) 36,096,000
All share options except those that were granted at an exercise price of
4 pence in 2012 were exercisable at the year-end. The highest and lowest
price of the Company's ordinary shares during the year was 3.5p and
0.12p respectively, and the share price at the year end was 0.28p.
18 SHARE-BASED PAYMENTS
The Company's current share option scheme was adopted on 27 July 2012.
Under this scheme no share options shall be granted which would, at the
date of grant, cause the aggregate number of share options granted to
exceed 10% of the issued ordinary share capital of the Company. At
December 31 2013 the number of share options granted as a percentage of
the issued share capital was 4.14%. Share options granted under the
scheme may be made in tranches subject to separate exercise periods.
There are no performance conditions associated with the share options.
No share options were granted during 2013 and the unvested share options
for the employees and Directors who left during 2013 vested on
termination resulting in an acceleration of the remaining share based
payment charge to the Statement of Comprehensive Income. Details of
share options granted in 2014 are included in note 22.
19 FINANCIAL INSTRUMENTS
The Company uses financial instruments, comprising short-term deposits,
cash, liquid resources and various items such as other receivables and
other payables that arise directly from its operations. The main purpose
of these financial instruments is to manage the cash raised to finance
operations. The Company has not used derivatives, embedded derivatives
or hedging as defined under IAS 39 during the year. The main risks
arising from the use of financial instruments are liquidity risk and
currency risk. The Directors review and agree policies for managing
these risks and these are summarised below:
Liquidity risk
The Company, at its present stage of development, have no sales
revenues. Operations are financed through the issue of equity share
capital in order to ensure sufficient cash resources are maintained to
meet short-term liabilities. Management monitors the availability of
funds in relation to budget expenditures in order to ensure fund raising
is planned in a timely fashion. Funds are raised in discreet tranches to
finance activities for limited periods. Funds surplus to immediate
requirements are placed in liquid, low risk investments. The ability to
raise finance is subject to a number of factors including but not
limited to: the state of the world financial markets and attractiveness
of the Company's projects.
Foreign currency risk
Foreign exchange transactions are settled at spot rate and the Company
takes its profit or loss on these transactions as they arise. The
Directors review the policy on foreign currency risk on a regular basis.
The Company's exposure to US dollars is detailed below and is expressed
in pounds sterling.
Foreign currency monetary assets US$
2013 2012
Functional Currency GBP GBP
Pounds Sterling 8,966 508,332
-- A sensitivity analysis has been prepared on the basis that the components
of financial instruments in foreign currencies are all constant, as in
place at 31 December 2013. As a consequence, this sensitivity analysis
relates to the position as at 31 December 2013. The following assumption
were made in calculating the sensitivity analysis:
-- All Statement of Comprehensive Income sensitivities also impact
equity.
-- Using the above assumption, the following tables show the illustrative
effect on the statement of comprehensive income and equity that would
result from possible changes in the foreign currency:
2013 Company Projection:
Comprehensive income/(loss) Equity
5% fall in value of GBP vs USD 448 448
5% increase in value of GBP vs USD (427) (427)
Market risk
-- The Company's financial instruments affected by market risk include bank
deposits, other receivables and other payables. The following analysis,
required by IFRS 7, is intended to illustrate the sensitivity of the
Company's financial instruments as at 31 December 2013 to changes in
market variables, being exchange rates and interest rates.
-- A sensitivity analysis has been prepared on the basis that the components
of financial instruments in foreign currencies are all constant, as in
place at 31 December. As a consequence, this sensitivity analysis relates
to the position as at 31 December. The following assumptions were made in
calculating the sensitivity analysis:
-- All Statement of Comprehensive Income sensitivities also impact
equity.
-- The majority of debt and other deposits are carried at amortised
cost and therefore carrying value does not change as interest
rates move.
-- Using the above assumptions, the following tables show the illustrative
effect on the Statement of Comprehensive Income and equity that would
result from possible changes in interest rates:
2013 Company Projection:
Comprehensive Income/(loss) Equity
5% fall in UK interest rates (961) (961)
5% increase in UK interest rates 1,009 1,009
At the 31 December 2013 there were no term deposits. The Company held
the majority of its cash and cash equivalents in instant access deposit
accounts. The majority of zero interest rate funds are held by our
overseas affiliates to meet short term other creditor commitments.
Cash and cash equivalents
2013 2012
GBP GBP
Floating interest rate (by reference to bank base
rate) 126,851 2,829,759
Zero interest rate 50,146 760,757
176,997 3,590,516
The Company's credit risk exposure is solely in connection with the cash
and cash equivalents held with financial institutions. The Company
manages its risk by holding surplus funds in high credit worthy
financial institution and maintains minimum balances with financial
institutions in remote locations.
2013 2012
GBP GBP
Financial institution with Standard & Poor's AA -
rating or higher 176,997 3,590,516
Financial institution un-rated or unknown rating -
176,997 3,590,516
Fair value of financial instruments
The fair values of the Company's financial instruments at the 31
December 2013 and 2012 did not differ materially from their carrying
values.
The Company does not have any long term borrowings, nor does it hold any
derivative financial instruments.
20 COMMITMENTS UNDER OPERATING LEASES
At 31 December 2013 the Company had annual commitments under
non-cancellable operating leases in respect of land, buildings and
equipment totalling GBP6,952 for 2014 and a total of GBP8,662 for
2015-2017 (2012: GBP41,203).
21 CAPITAL COMMITMENTS
The Company had no capital commitments at 31 December 2013 or 31
December 2012.
22 EVENTS AFTER BALANCE SHEET DATE
On 10 February 2014 share options over Ordinary Shares were awarded to
Directors as follows:
Name Number of options granted Exercise dates
Julian McIntyre 10,000,000 Expire 10 February 2015
Venkat Siva 10,000,000 Expire 10 February 2015
Mark Thompson 10,000,000 Expire 10 February 2015
Paul Colucci 10,000,000 Expire 10 February 2015
Robert McLearon 5,000,000 Expire 10 February 2015
These options will only vest on completion of an acquisition or
acquisitions which constitute a reverse takeover under the AIM Rules for
Companies or when the Company otherwise implements its investing policy
(which has been approved by shareholders) to the satisfaction of the
London Stock Exchange plc.
On 9 April 2014 the Company announced that Julian McIntyre, Mark
Thompson and Paul Colucci sold their shares in the Company and that
therefore no Directors held shares in the Company.
On 8 May 2014 the Company announced that Mark Thompson and Paul Colucci
had resigned with immediate effect.
On 28 May 2014 the Company announced that Julian McIntyre and Venkat
Siva had resigned with immediate effect and surrendered their share
options.
On 30 May 2014 the Company announced that Nick Clarke and Kola Karim had
been appointed as directors of the Company.
On 17 June 2014 the Company entered into a loan facility with Nick
Clarke and Kola Karim whereby it can draw down a maximum of GBP365,000
until 30 November 2015 paying interest on the sum drawn down and any
unpaid interest at 5% per annum.
23 RELATED PARTY TRANSACTIONS
There were no related party transactions during 2013 or 2012 for the
Company other than the Directors' remuneration as disclosed in Note 8.
Directors' remuneration includes GBP2,500 paid to Mining Finance
Solutions in 2012, a company owned by Euan Worthington and includes fees
of GBP136,000 to HAWM Consulting, Inc in 2013, (2012: GBP107,035) a
company owned by Trevor Moss.
Enquiries:
African Eagle Resources plc Tel: +44 (0) 20 7002 5361
Robert McLearon, Finance Director
Beaumont Cornish Limited (Nominated Adviser) Tel: +44 (0) 207 628 3396
Roland Cornish
Emily Staples
Pareto Securities Limited (Broker) Tel: +44 (0) 20 7786 4370
Guy Wilkes
About African Eagle
African Eagle Resources plc is quoted on the AIM Market of the London
Stock Exchange (AFE) and Johannesburg AltX (AEA) stock exchanges.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: African Eagle Resources PLC via Globenewswire
HUG#1795010
http://www.africaneagle.co.uk/
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